Social Security, the easy way to fix it...

Discussion in 'Social Security' started by Darkbane, Jun 13, 2015.

  1. Darkbane

    Darkbane Banned

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    Sooo we always hear about problems with social security, money running out, reductions in benefits, or raising the age of retirement... and all anyone does is put a band-aid on the current program, shifting the numbers without ever solving the problem...

    What if... we kept the payroll deductions for both the employee and employer... but instead of sending that off to the government, we put it in a 401k style program linked to that persons, you guessed it, social security number... what would happen if we did this???

    I think this would lead to several things happening... well let's be honest suddenly people would want stock prices to go higher, people would become much more pro-business when they see the rise and fall of the stocks they own... this would please conservatives... but now those people would also get voting rights at the company as stock holders, giving them the ability to vote on ceo's and their pay and benefits... this would please progressives...

    What happens when you die at age 65, before you collected one cent of what you "earned" and are "entitled" to with social security... nothing, you never see this "not a tax but a savings" for you... but now if you had a 401k style account, linked to your social security number, you could define who receives this money, or it would go to your general estate... but YOU would get YOUR money...

    that single change, allowing your heirs or whoever you designate to receive your money after death, it would dramatically change wealth in america... now suddenly upon your early or late death, it would be like a massive life insurance policy, quickly giving wealth to people who may not have any... what if a family in poverty, children over 18, as a result of your savings, would get that 100,000 200,000 300,000 in your 401k instead of the government keeping your social security... how dramatic would that change your families life after your unfortunate early death...

    what if, as a result of this account being in your name, and now you decide when you retire... people are suddenly able to make decisions later on in life, that they could retire earlier, as a result of other investments, or other income allowing them to retire earlier... what if some people could now decide to let that money compound a few more years, and retire later which much more money... giving people a choice is a wonderful thing...

    now this won't work so well for people 25+ in age, as the power of compounding really does need a lot of time to work out very well, the last few years are often the ones that give you the spending power you desire... but 40 years is a reasonable time to allow a late start... but think of those who started contributing from their first job at age 16? they would be compounding money for almost a decade longer, despite the fact they would be putting small amounts in, it would give the most significant gains after compounding for so long...

    anyone with a 401k calculator can plug in the numbers, expect an average S&P 500 return, and figure out where they in theory will end up... but wouldn't it be nice if people got an annual statement showing money they actually own, versus a statement that says how much they would get, assuming they even live to see it? an actual asset and wealth, versus a promise that might never come to be...

    anyhow thats my social security rant... you could apply this same logic to medicare... why should the government get control of your money, you earned it, they claim its not a tax since you get it back, but they won't let YOU control it, because that would give YOU the power... and they don't care for that much... take back your power america... you earned it, you deserve to control it...
     
  2. Durandal

    Durandal Well-Known Member Past Donor

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    Forced investment in the stock market? That would pretty much tear down the last shred of the veil obscuring what our government truly is at this point, which is a government owned and controlled by bankers and financiers, and by others in the corporate world, where the imbalance of wealth has primarily ended up today.

    Defund and tear down the federal government, and rebuild it from scratch to be once again the small, limited government with very specific responsibilities that it was created to be by the nation's founders. As for retirement, there are any number of ways to handle that without relying on one megalithic scheme like SS.
     
  3. Darkbane

    Darkbane Banned

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    You are already forced to invest in social security, so why instead of giving that money in exchange for a promise that might not be delivered, have the freedom to choose what is done with your money in investments? is a choice what to do with it, better than no choice? and if you had the choice on what to invest in, you would be taking power away from the corporate world since you would now as a stock holder have voting rights in said companies that are traded...

    so basically my idea would do exactly what you want, defund and tear down the federal governments control over your money and empower you to make choices that you want with it, instead of hoping the government gets it right and one day returns the money... so I'm struggling to understand what you are saying... you seem to be suggesting my idea as bad, but then the actual results of what I propose would do everything you stated you want... sooooo... sup?
     
  4. Phoebe Bump

    Phoebe Bump New Member

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    We did have the freedom to choose what was done with your money for a long, long, time. Then the banks failed.

    Doing it yourself or telling Social Security what to do with it is the same thing.
     
  5. Deckel

    Deckel Well-Known Member Past Donor

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    Expanding immigration is the way to fix social security and solve the demographic bulge that is causing issues. People have to decide if having less green in exchange for having less brown is really worth it to them.
     
  6. Mr_Truth

    Mr_Truth Well-Known Member

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    Social Security is fiscally sound and will remain that way for many more years to come, contrary to the lies of the far right.

    But a way to insure that it will always be solvent is to end all foreign tax shelters as I have said here many times.
     
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  7. maat

    maat Well-Known Member Past Donor

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    Complete BS. SS has zero funds. It is funded by current taxes which are falling short by 100's of billions each year and borrowed deficits. You are buying into the Enron accounting. Just another Greece in the making.
     
  8. OldManOnFire

    OldManOnFire Well-Known Member

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    Since the government does not have any reserve funds for SS and Medicare, etc., if you stopped giving FICA monies to government today how would government fund SS and Medicare for the next 3-5 decades until your private accounts kick in?

    The government will have a shortfall of income once it cannot use the FICA surplus funds...more debt or reduced government.

    Additionally, the government has about $2.8 trillion in SS treasuries and $275 billion in Medicare so without FICA income to the government, the government would need to cash out those treasuries to 'help' fund SS and SSI and Medicare. All of this will be more national debt.

    Someone needs to fund Medicare and Disability so FICA withholding will continue but at a lower rate.

    You are talking about trillion$ being invested in private investment funds...what will this do to the stock market values? How will the companies holding trillion$ be regulated? Who backs a company that goes belly-up?
     
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  9. FreshAir

    FreshAir Well-Known Member Past Donor

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    end the caps for the rich and make every American pay the same percent of every dollar they earn
     
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  10. merrill

    merrill New Member

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    Yes to that I say absolutely.

    Meanwhile 401k's are over rated as politicians seem to have a feel for doing things that send to many up in smoke. Invest 401k's in Wall Street is as reckless as it gets.

    Moving Social Security Insurance to private accounts(Wall Street) could cost taxpayers up to $4 trillion dollars and wouldn't the financial industry love that. And it would increase debt substantially which we hear the American Legislative Exchange Party whining about 24/7. In essence and putting simply, moving to a system of private accounts would not only put retirement income at risk—it would very very likely put the entire economy at risk.

    BTW the American Legislative Exchange Party is posing as the Republican Party which is unethical and misleading.

    Wall Street is only sound for those who can afford to lose money therefore does not fit 99.5% of the USA population.
     
  11. FreshAir

    FreshAir Well-Known Member Past Donor

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    401k should not replace social security

    401k has benefits such as not being able to be touched in bankruptcy, ect....
     
  12. OldManOnFire

    OldManOnFire Well-Known Member

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    Regarding a 401K account; if you withdraw money from your retirement account and purchase other assets or place the money in a regular bank account prior to filing for bankruptcy, it will not receive the special protections afforded to retirement funds. In addition, if your retirement plan is fraudulent or otherwise not a legitimate retirement account, then it will not be protected in bankruptcy.
     
  13. Iriemon

    Iriemon Well-Known Member Past Donor

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    Tens of millions of senior would be thrown out in the street when their SS checks stopped coming.

    Any other ideas?
     
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  14. Iriemon

    Iriemon Well-Known Member Past Donor

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    SS funding hasn't been short in decades. To the contrary, it has for decades generated more tax revenue than it paid out. You've been mislead by RW propaganda again.

    http://www.cbo.gov/sites/default/files/cbofiles/attachments/45249-2015-01-HistoricalBudgetData2.xlsx

    However, it is true that the gap in SS surplus taxes is drastically shrinking, and will turn into a large deficit as more boomers retire.
     
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  15. FreshAir

    FreshAir Well-Known Member Past Donor

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    it's only protected while it's in the 401k, if you withdraw it, it's no longer in the 401k, thus not protected, your correct...
     
  16. Iriemon

    Iriemon Well-Known Member Past Donor

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    And the exemption for investment income as well.
     
  17. FreshAir

    FreshAir Well-Known Member Past Donor

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    everyone should pay the same ss tax for every dollar earned, the rich should not be capped on how many dollars they pay the tax on
     
  18. Iriemon

    Iriemon Well-Known Member Past Donor

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    I could argue that taxes should be progressive, and that a flat tax like SS, even without the caps and exemptions, is really a regressive tax because if falls more heavily on the poorer relative to non-disposable income.
     
  19. Darkbane

    Darkbane Banned

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    thats a completely separate issue to correct for a short-term period... my goal was to solve the problem of the constantly failed system currently in place... is it better to solve a problem and have a short-term issue to fix, or keep the long-term problem that will constantly need fixing over and over and over again?

    the amount of money in SS will not stop payments from being made immediately, it has a large reserve that by some estimates would last roughly 6-10 years depending on returns of the current reserves... so we don't have to come up with a solution for 100% of the money... we only need to solve 75% of the problem now... now you can start to come up with creative ways to fill the hole... a general sales tax? a progressive income tax? I don't know, all I know is we stopped the future mass problem of this program never having enough money to fill the gaps and inflation, to a program controlled and sustained by the free market and owned by the people who earned the money, not a promise by politicians who clearly can't uphold the promise made anymore...

    so either way... I solved the problem in a way that created more wealth for those who earned it... and gives them the power to force the market to react to them, not them to react to the market... more power for the people... we cut the current problem from 100% of the cost, to 75% of the cost... now all we have to do is find a creative way to fund the remaining 75% of the system and then allow it to be completely phased out in 30 years from now... making it cost us $0 going forward from then...

    other people have floated the idea around, why not just put $5000 into a ROTH IRA for every child born in america... and keep the income/payroll taxes going to cover social security and the cost of the $5000 to each baby born... essentially doing almost what I suggest, just in a government funded program rather than an individual funded program... almost same concept, almost same results... having 60 years in an IRA that is all tax free on withdrawal in retirement, would surely change the future of all americans... and we would't be paying dollar for dollar to achieve it... we'd essentially be paying 1/300th the cost... it all just seems like a no brainer to do something...

    P.S. with people living longer and longer every year, it only makes sense to have a program that won't constantly need changing every couple years and raising the retirement age... if we allow people to have a retirement account of all their money, they can make the choice when to retire and if they can transition earlier even to part-time work or earlier retirement than currently required... some people will easily be able to retire earlier, because of sheer income over the years, but we won't allow it since we have a one-size fits all that doesn't work for everyone... its not flexible and gives the least options for moving people out of the work force to free up jobs for the youth...
     
  20. FreshAir

    FreshAir Well-Known Member Past Donor

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    ss tax I consider more like a sales tax..... it applies to every dollar earned..... same as the other applies to every dollar spent, the more you make or spend, the more dollars you pay tax on
     
  21. Iriemon

    Iriemon Well-Known Member Past Donor

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    I disagree it has failed, but if you take current SS tax revenues and put them in a 401k type of think, you have cut off the funding that supports tens of millions of seniors.

    Furthermore, a 401k system creates another whole host of problems.

    What are you going to do with the folks who run out of money?
    The reserve is government debt that Govt will have to use tax revenue to redeem, so you end up with the same problem. And what are you going to do with the scores of millions of seniors when the reserve runs out?

    If you want to increase taxes, you can just increase taxes to balance SS out and there's no more problem.

    I disagree for reasons stated above, and note you've now created a whole host of problems.

    Even if you assume historic stock market performance, you end up way short of funding a retirement.

    See above.

    - - - Updated - - -

    That is why I oppose a sales tax. It is very regressive and shifts the tax burden to the poorer.
     
  22. cjm2003ca

    cjm2003ca Active Member

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    and when you invest your money and lose ot what will happen then?...have you ever really invested in the stock market?..it isnt really that easy ...there are more losers than gainers
     
  23. maat

    maat Well-Known Member Past Donor

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    Check to trustee reports less general revenues. Besides, the only way the government fixes shortfall in the past was to raise the Fico taxes.

    General revenues do not count when claiming self funded.
     
  24. maat

    maat Well-Known Member Past Donor

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    Wrong, the SCOTUS did not pass SS to be a Ponzi welfare program. It was to have caps and benefits that did not reflect forced redistribution. You are advocating an expansion well beyond its original implementation and SCOTUS clearance.
     
  25. Iriemon

    Iriemon Well-Known Member Past Donor

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    General revenues have not been used to fund SS. To the contrary, trillions in SS taxes have been used as general revenues.
     

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